Step 3: Narrow the search

Examine the size of the company’s assets and investigate how long a company has been in operation, especially in the business of long-term care insurance, and have a track record. Pay particularly close attention to history of rate increases. Also, call your state Superintendent of Insurance Department to see if there are any problems with the company. Finally, make sure you consider companies that offer a variety of policies: individual coverage, joint coverage, family coverage and partnership plans, where applicable.

Step 4: Customize the policy and choose the plan that’s best for you

This is the most complicated step since the number of variations available is staggering.

The three areas that will most influence the cost are:

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  1. How much benefit is purchased (received either as a daily or monthly benefit)
  2. How long the benefit will last (usually defined by a specified number of years)
  3. How soon the benefit begins (defined by a specified number of days).


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Keep in mind that there is no “right” policy, just more appropriate ones for you and your partner. It’s likely that several companies will offer excellent programs for pretty much the same price.

Other Considerations

 Guaranteed Renewability: Most long-term care insurance policies are guaranteed renewable, meaning the insurance company must renew your coverage as long as your premiums are paid in a timely manner. But guaranteed renewable also grants the insurance companies protection against adverse claims experience. That means that while a company cannot single you out and increase your personal premium, it can increase the cost of insurance across the board within a certain group.

Cost of Living Adjustment Rider (COLA): If you don’t submit a claim until later, you’ll want to be sure that you still have enough coverage to account for increases in the cost of care. To protect against inflation increases, you’ll want the policy to include protection against inflation both prior to and once you’ve made a claim.

Non-forfeiture Benefit: If you eventually suffer from a cognitive impairment and are either unaware of receiving the premium bill or forget to pay it, the policy coverage could lapse due to nonpayment of premium. With a non-forfeiture benefit, the policy would not be canceled.

Waiver of Premium: Waiver of premium means that if you submit a claim against the policy, the company will waive all future premiums for a specified time while you are receiving benefits. The time period for premium waiver varies from carrier to carrier: some offer a 90 day period, some a 100 day period, and others a 180 day period. Preferably, choose a policy with a waiver of premium that becomes effective after a short time period.

Posted 1:18 PM

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